Methods for collecting fees for healthcare management group

ABSTRACT

Methods are provided for collecting fees for managing and optimizing the profitability of a plurality of physicians in a healthcare practice participating in an insurance network. The methods include establishing a relationship between a healthcare consultation group and the healthcare practice participating in the insurance network to increase the physician&#39;s profitability by reducing a risk of not receiving a predetermined reimbursement amount for ancillary medical costs from the insurance network. The methods also include distributing predetermined percentages of savings attributed to the physicians&#39; modified ancillary medical cost management behavior.

RELATED APPLICATIONS

[0001] The application is related to U.S. patent application Ser. No._______titled “Methods and Systems For Healthcare Practice Management”filed on the same date herewith by the same inventors, which isincorporated herein by reference in its entirety.

FIELD OF THE INVENTION

[0002] The present invention relates to the healthcare industry and,more particularly, to the field of healthcare management.

BACKGROUND OF THE INVENTION

[0003] In the healthcare industry, as illustrated in FIG. 1, physiciansgenerally organize themselves into practice groups 25 and normallysubcontract to an insurance network 30. The insurance network 30 is notlimited to traditional insurance networks, i.e., Blue Cross Blue Shield,Aetna, United Healthcare, etc., but also include self insured networkswithin companies, employers, or other large entities. The insurancenetwork 30 includes a plurality of patients 35 that obtain healthcareservices from the plurality of physicians 25 participating in theinsurance network 30. The groups of physicians 25 include a plurality ofphysicians 25 that provide healthcare services to a plurality ofpatients 35 within a particular geographical area in varying medicalfields. The physicians in the healthcare practices 25 are normallycompensated a predetermined reimbursement amount by the insurancenetwork 30 for every subscribing patient 35 in the insurance network 30that is to be treated by the physicians 25.

[0004] For example, a physician 25 participating in the insurancenetwork 30 may be reimbursed $80 per month by the insurance network 30for agreeing to treat a patient 35 in the insurance network 30 andassume the responsibility for a percentage of the ancillary medicalcosts 45 for that patient 25. As illustrated in FIG. 1, there exists arelationship between the insurance network 30 and the physician practice25. Likewise, there also exists a relationship between the patients 35and the insurance network 30, and the patients 35 and the physicianpractices 25. The physician practice 25 normally receives payment forservices directly from the patients 35 or through reimbursements fromthe insurance network 30. The payment that is received from the patient35 can be in the form of a co-payment or a partial payment for thehealthcare services. In order for the physician practice 25participating in the insurance network 30 to receive the entirereimbursement from the insurance network 30, i.e., the $80 per month foragreeing to treat each patient 35, the physician practice 25 must complywith preselected requirements set by the insurance network 30. Theserequirements often fall within varying cost centers 45, such aspharmaceutical, laboratory, anesthesiology, and radiation costs, forexample.

[0005] In the pharmaceutical area, for example, a wide variety ofprescription medications are developed and manufactured to combatsimilar illnesses. As illustrated in FIG. 1, prescription medicationmanufacturers 24 sometimes enter into agreements with the insurancenetwork 30. The prescription medication manufacturers 24 sometimes offerrebates to insurance networks 30 if the physician practice 25 prescribestheir medications. The prescription medication manufacturers 24 cannotenter into these types of agreements with the physician practices 25, asit would likely be contrary to public policy. The insurance network 30,in turn may enter into an agreement with a pharmacy network 21, such asa pharmacy benefits management (PBM), for example, to encourage thephysician practice 25 in the insurance network 30 to prescribe certainmedications. The PBM is compensated a profit on the preferredprescription medications, and a portion of the profits are then passedalong to the pharmacy 40. The requirements, or preferences, set by theinsurance network 30 regarding pharmaceutical costs, for example,include the types of prescription medications that the physicians mayprescribe to their patients.

[0006] In some instances, the insurance networks provide incentives tothe physician practice 25 for prescribing medications upon which, theinsurance network 30 receives discounts from prescription medicationmanufacturers 24. If the physician practice 25 bears any percentage ofmedication costs for the patient 35 and prescribe medications whichdiffer from those preferred by the insurance network 30, the incentivesmay be withheld from the physician practice 25, i.e., the physicianpractice 25 may be paid nothing instead of $10 for the patient 35 in theinsurance network 30. As illustrated in FIG. 1, the insurance network 30monitors the prescriptions that the physician practice 25 participatingin the insurance network 30 write through a monitoring relationshipdeveloped with pharmacies 40 and pharmacy networks 21. In thismonitoring relationship, the pharmacy 40 and the PBM provide claims datato the insurance network 30.

[0007] There are many different levels of risk for the physicianpractice 25 that is associated with this arrangement. If the insurancenetwork 30 assumes the financial responsibility for the patient's 35healthcare needs, then the physician practice 25 assumes no risk. If,however, the physician practice 25 assumes the financial responsibilityfor the patient's healthcare needs, i.e., any healthcare costs beyondthe reimbursement amount from the insurance network 30, then thephysician practice 25 assumes the most risk. Another alternativearrangement is if the financial responsibility for the patient's 35healthcare needs are shared between the physician practice 25 and theinsurance network 30. In such an arrangement, the risk for patient's 35healthcare costs is shared between the insurance network 30 and thephysician practice 25. As illustrated in FIG. 1, the payments betweenthe insurance network 30 and the physician practice 25 can varydepending upon the amount of risk taken by the physician practice 25.

[0008] As further illustrated in FIG. 1, patients 35 participating inthe insurance network 30 obtain healthcare treatment from the physicianpractice 25 and pay premiums or insurance payments to the insurancenetwork 30. They medical treatment provided to the patients 30 by thephysicians in the physician practice 25 can include prescribingmedications. The patients 35, however, obtain the prescriptionmedications from the pharmacy 40 and provide either a full payment or aco-payment for the prescription medications. The patient 35 can then bereimbursed for some or all of the payment for the prescriptionmedications from the insurance network 30.

[0009] This arrangement is disadvantageous for the physician practice 25participating in the insurance network 30 because it requires a greatdeal of management and organization to follow the requirements of theinsurance network 30. The system is even more disadvantageous for thephysician practice 25 if it participates in multiple insurance networks30. Each insurance network 30 maintains a preferred list of prescriptionmedications, for example, that the physician practice 25 may prescribeto the patients 35. Further, each insurance network 30 updates theirpreferred list of prescription medications on a routine basis. Thephysician practice 25 in the insurance network 30 generally attempts tospend the majority of their time treating patients 35. The managementand organization of the insurance network 30 requirements can be timeconsuming and eliminate some of the time that a physician practice 25may normally dedicate to the treatment of patients 35.

[0010] Traditionally, there also has been tension between the physicianpractice 25 and the insurance network 30. The tension can be caused bythe insurance network 30 delaying payment to the physician practice 25with notification of a particular network requirement that has beenviolated, if any. In addition, the physician practice 25 normallyreceive very little support from the insurance network 30, such aspatient history updates and information on medication costs. Tensionsare also sometimes caused by the insurance network's 30 perception thatthe physician practice 25 over-bills for treatment and does not provideall possible treatment options for patients 35. The physician practice25 sometimes feel pressured by the insurance network 30 to providemedical treatment to their patients 35 according to the preferences ofthe insurance network 30 instead of according to their own medicaljudgments. Of course, the physician practice 25 is free to independentlytreat the patients 35 in the insurance network 30 based on medicaljudgment, but the tension between the physician practice 25 and theinsurance network 30 still exists.

[0011] The physician practice 25 is not bound by the treatmentprocedures that are preferred by the insurance network 30. Often,however, conflict between the insurance network 30 and the physicianpractice 25 can arise when the insurance network 30 prefers thephysician practice 25 to perform certain medical procedures or prescribeparticular medications that are more profitable to the insurance network30. The physician practice 25 does not have the time necessary toperform exhaustive research necessary to determine if the treatmentproposed by the insurance network 30 is feasible, or even safe, topatients 35. Prudent physicians in the physician practice 25 often donot change their treatment practices based simply on informationprovided by the insurance networks 30.

[0012] In the interest of patient safety, physicians in the physicianpractice 25 should research medical literature to become more educatedas to possible benefits of alternative medications. As noted above,however, this takes a great deal of time that can better be used totreat patients 35. In order to conserve the time that might normally bespent on managing and organizing the insurance network 30 requirements,however, some physician practices 35 may hire office managers. This isdisadvantageous because an office manager can be extremely costly andwill normally need office space. The office space that may be used bythe proposed office manager may be an examination room in which thephysician would normally treat patients 35. Once again, this cuts downon the number of patients 35 that the physician practice 25 can possiblytreat. The office manager also often only manages finances and personneland has little understanding of physician practices 25 with respect torelationships between insurance networks 30 and physicians' 25 decisionsand practices with respect to patients 30.

[0013] It has been proposed that the performance of a first healthcareprovider can be compared to the performance of a second healthcareprovider using a computer program as described in U.S. Pat. No.5,652,842 titled “Analysis and Reporting of Performance of ServiceProviders”, by Siegrist, Jr. et al. More particularly, a method ofmonitoring customer satisfaction so as to keep the healthcare providerscompetitive in many different fields is described. The method describedin Siegrist, Jr. et al., however, is disadvantageous to group physiciansin organizing and managing healthcare costs that are dependant uponpreferred treatment of the insurance network.

[0014] Often times, in an effort to become more profitable, a healthcarepractice 25 or a self insured employer may study the currentrelationship between the healthcare practice group 25 and the insurancenetwork 30 or hire a business consultant to analyze this relationshipand make recommendations as to how to become more profitable. This,however, is disadvantageous because the business consultant does nothave accountability for the results. In other words, the businessconsultant analyzes the situation, makes a recommendation and collects afee for the time spent in analyzing the situation. This is normally theend of the relationship between the business consultant and thephysician 25. The responsibility for implementation is then shifted tothe healthcare practice 25, with some added knowledge provided by thebusiness consultant who has collected a fee and exited the situation, tomake the practice more profitable with no assistance.

[0015] Hiring a business consultant is also disadvantageous because thehealthcare practice 25 has to assume risk for engaging the businessconsultant to review the healthcare practice 25. This is alsodisadvantageous because prudent physicians will normally take time toevaluate the expertise of the business consultant if the situation callsfor the healthcare practice 25 to assume a risk. This is furtherdisadvantageous because the healthcare practice 25 is left with theresponsibility of implementing the suggestions of the businessconsultant in cases where the consultant merely analyzes the situationand provides information.

[0016] When the physician practice 25 is not able to organize and managemedical treatment information in a manner that is preferred by theinsurance network 30 in which they participate, there only exist twopossible results. Either the physician practice 25 receives lowerreimbursements from the insurance network 30, or the insurance network30 is less profitable. No matter which result occurs, however, theultimate end result is higher medical costs for patients 35. Therefore,the patients 35 are the real losers in the situations described above.

SUMMARY OF THE INVENTION

[0017] With the foregoing in mind, the present invention advantageouslyprovides a system and methods for optimizing profits of a healthcarepractice. The system and methods of the present invention alsoadvantageously assist physicians and insurance providers in providingcost-effective healthcare services to patients. The present inventionadditionally advantageously eliminates the time necessary for physiciansto conduct exhaustive research in determining if alternative, and moreprofitable, ancillary medical procedures are beneficial to theirpatients. The present invention also advantageously substantiallyreduces manpower, expense, and tool-development necessary to implementmanagement changes that decrease healthcare costs. The system andmethods of the present invention further advantageously assist incontrolling the rising costs of medical care by reducing physicians'ancillary medical costs. The present invention still furtheradvantageously strengthens the relationship between physicians andinsurance providers by providing an intermediary between the two. Thepresent invention also advantageously decreases financial risk for ahealthcare practices or an insurance network in engaging a healthcareconsultation group to manage healthcare costs.

[0018] The present invention also advantageously provides a pricing,billing, or charging structure that provides accountability to ahealthcare consultation group. If the healthcare consultation group canbe held accountable for performance, then healthcare practices andinsurance networks are more likely to trust. Further, the healthcarepractice and the insurance network are provided an incentive to employthe services of the healthcare consultation group.

[0019] More particularly, the present invention provides a method ofcollecting fees for managing and optimizing the profitability of aplurality of physicians in a healthcare practice participating in aninsurance network. The method includes the step of establishing arelationship between a healthcare consultation group and the healthcarepractice participating in the insurance network to increase thephysician's profitability by reducing a risk of not receiving apredetermined reimbursement amount for ancillary medical costs from theinsurance network. The method also includes the step of distributingpredetermined percentages of savings attributed to the physicians'modified ancillary medical cost management behavior. The method ofcollecting fees can also advantageously include the step of funding anincentive pool to be paid to the healthcare practice participating inthe insurance network if the healthcare costs of the plurality ofphysicians in the healthcare practice decrease to a predetermined levelover a preselected period of time.

[0020] The present invention also advantageously includes a method ofcollecting fees for managing and optimizing the profitability of aninsurance network having a plurality of physicians in a healthcarepractice participating therein. The method advantageously includes thestep of establishing a relationship between a healthcare managementconsultation group and the healthcare practice participating in theinsurance network to increase the insurance network's profitability bylimiting the plurality of physicians' ancillary medical cost managementbehavior that is not preferred by the insurance network. The method alsoincludes the step of distributing predetermined percentages of savingsattributed to the physicians' modified ancillary medical cost managementbehavior.

[0021] The present invention advantageously includes the formation of ateam relationship working towards a common goal having alignedincentives, i.e., a team working towards the goal of enhancingprofitability. The present invention also advantageously providesaccountability to the healthcare consultation group. Accountability willease the minds of the healthcare practice and insurance network givingthe healthcare consultation group a chance to prove that profits can beenhanced. This arrangement advantageously allows all involved to gain,including patients through more cost-effective medical care. The presentinvention also advantageously eliminates the time necessary forhealthcare practices and insurance networks to research references ofthe healthcare consultation group because there is no risk for theinsurance network or the healthcare practice to engage the healthcareconsultation group.

BRIEF DESCRIPTION OF THE DRAWINGS

[0022] Some of the features, advantages, and benefits of the presentinvention having been stated, others will become apparent as thedescription proceeds when taken in conjunction with the accompanyingdrawings in which:

[0023]FIG. 1 is a schematic view of a typical relationship betweenphysicians, insurance networks, and patients according to the prior art;

[0024]FIG. 1A is a schematic view of a relationship between physicians,insurance networks, patients, and a healthcare consultation groupaccording to the present invention;

[0025]FIG. 2A is a flow chart describing the method of managingancillary medical costs for healthcare practices and insurance networksaccording to the present invention;

[0026]FIG. 2B is a flow chart describing the method of modifyingancillary medical procedures according to the present invention;

[0027]FIG. 2C is a flow chart describing the method of educatingphysicians on the benefits of alternative ancillary medical proceduresaccording to the present invention;

[0028]FIG. 3 is a flow chart describing the method of managing ancillarymedical costs and optimizing profitability for an insurance networkaccording to the present invention;

[0029]FIG. 4 is a schematic view of a system for a healthcare practiceincluding a plurality of physicians participating in an insurancenetwork according to the present invention;

[0030]FIG. 5 is an environmental view of a physician accessing acommunications network through a user interface of a system for ahealthcare practice to obtain information regarding management ofancillary medical costs according to the present invention;

[0031]FIG. 6 is an environmental view of a physician researching aninformation card positioned in a patient's chart to determine if analternative ancillary medical procedure is appropriate according to thepresent invention; and

[0032]FIG. 6A is a front elevational view of an information card thatcan be positioned in a patient's chart according to the presentinvention.

DETAILED DESCRIPTION OF PREFERRED EMBODIMENTS

[0033] The present invention will now be described more fullyhereinafter with reference to the accompanying drawings which illustratepreferred embodiments of the invention. This invention may, however, beembodied in many different forms and should not be construed as limitedto the embodiments set forth herein. Rather, these embodiments areprovided so that this disclosure will be thorough and complete, and willfully convey the scope of the invention to those skilled in the art.Like numbers refer to like elements throughout, the prime notation, ifused, indicates similar elements in alternative embodiments.

[0034] FIGS. 1A-9 illustrate systems and methods of optimizingprofitability of healthcare practices and insurance networks by managingancillary medical costs. As illustrated in FIG. 1A, the presentinvention preferably includes a healthcare consultation group 22 thatforms an intermediary relationship between a healthcare practice 25 andan insurance network 30. The healthcare practice 25 preferably includesa plurality of physicians 27 practicing in one or more medical fields ina particular geographic area. The healthcare consultation group 22determines the most efficient manner to manage ancillary medical costs45 to thereby increase profitability of the healthcare practice 25 andthe insurance network 30 by decreasing ancillary medical costs 45. Incases where the financial responsibility for patient care is dividedbetween the insurance network 30 and the healthcare practice 25, thehealthcare consultation group 22 can also advantageously manageancillary medical costs 45 of the insurance network 30 and thehealthcare practice 25 to thereby decrease ancillary medical costs 45,thereby increasing profitability of both the insurance network 30 andthe healthcare practice 25. Ancillary medical costs 45 can includepharmacy costs, for example. The ancillary medical costs 45 can alsoadvantageously include any one of a number of medical cost centers suchas taken from federally-defined hospital departments. These can include,but are not limited to, anesthesiology, blood, blood storage procedureand administration, radiology, electroencephalogram (EEG),electrocardiogram (EKG), emergency room, IV therapy, organ and tissueacquisition, labor and delivery, medical/surgical supplies, nuclearmedicine, occupational therapy, operating room, physical therapy,recovery room, renal dialysis, respiratory therapy, special care, speechtherapy, and therapeutic radiology. These general categories also can bebroken down into more specific categories as understood by those skilledin the art.

[0035] As perhaps best illustrated in FIGS. 1A-4, the present inventionprovides methods for managing a healthcare practice 25 to optimize theprofitability of the healthcare practice 25 by decreasing the healthcarecosts of the healthcare practice 25. As illustrated in FIG. 3, thepresent invention also provides methods of optimizing the profitabilityof an insurance network 30 having a plurality of physicians 27 in ahealthcare practice 25 participating therein by managing ancillarymedical costs 45, i.e., pharmacy costs, of the healthcare practice 25,or a combination of the healthcare practice 25 and the insurance network30. The present invention is particularly advantageous for use inassociation with pharmacy cost because of the large year to yearincreases in the cost of prescription medications and otherpharmaceutical related costs. The method of managing the healthcarepractice 25 and the method of optimizing the profitability of theinsurance network 30 includes gathering data 50 from each of theplurality of physicians 27 in the healthcare practice 25 participatingin the insurance network 30 regarding management of ancillary medicalcosts 45. The step of gathering of data 50 preferably includesconferring with the healthcare practice 25 and the insurance network 30to determine the number of patients 35 participating in the insurancenetwork 53 and the current ancillary medical procedure used to treatthose patients 35. In a case where the ancillary medical cost 45 ispharmacy cost, for example, the method includes gathering data from thephysicians 27 regarding the number of pharmacy claims over apredetermined period of time, the number of patients 35 treated by thephysician 27, and demographic information about the physician 27.

[0036] Data is also gathered from ancillary medical facilities 52regarding ancillary medical costs 45 of each of the plurality ofphysicians 27 in the healthcare practice 25 participating in theinsurance network 30. This data can advantageously include claimsinformation, claim types and cost data regarding the claims. This datacan also advantageously be gathered from the healthcare practice 25 orthe insurance network 30. The data collected from the ancillary medicalfacilities 40 can be available on an ancillary medical network database,such as a pharmacy network listing pharmacy costs for each of aplurality of physicians 27 in the healthcare practice 25. Again, in acase where the ancillary medical cost 45 is pharmacy cost, for example,the method of gathering data 50 includes obtaining average wholesalepharmacy costs from pharmacy networks such as First Databank, Red Book,and Blue Book, for example, or any other pharmacy network as understoodby those skilled in the art. The step of gathering data 50 from thepharmacy also includes getting monthly updates from the pharmacy networkregarding average wholesale pharmacy costs. The step of gathering data50 further preferably includes extrapolating a contracted price ofprescription medications from the pharmacy claims data.

[0037] If the ancillary medical cost 45 is pharmacy cost, for example,then the step of gathering data 50 can advantageously include preparinga management report that includes information regarding the physician'spharmacy cost performance measured by per member per month (PMPM) costs.The management report can also advantageously include a physician reportcard to inform the physician 27 of current performance and high costpatient reports from the physician 27. The report card is advantageouslydetailed for each physician 27 based on prescribing patterns, costs ofmanagement behavior to them and the healthcare practice 25,peer-reviewed alternative prescription medications, and potentialsavings if followed. The report cards are then presented to theidentified physician 27 so that they can perform their own analysis. Thehealthcare practice 25 can advantageously encourage the physician 27 togive the report consideration. The management report can alsoadvantageously include a list of the top medication providers, e.g., thetop fifty high-cost prescription medication providers and a pharmacycost management report.

[0038] The method of managing the healthcare practice 25 and the methodof optimizing the profitability of an insurance network 45 both furtherpreferably include identifying at least one physician 56 in thehealthcare practice 25 that is engaging in ancillary medical proceduresthat are not as profitable or preferred by the insurance network 30.Physicians 27 who engage in the ancillary medical procedures that arenot preferred by the insurance network 30 are sometimes at risk of notreceiving a predetermined reimbursement amount from the insurancenetwork 30. These ancillary medical procedures can include theprescription of medications that are not as profitable to the insurancenetwork 30 or the physicians 27 in the healthcare practice 25. In caseswhere the financial responsibility for patient 35 care is shared betweenthe healthcare practice 25 and the insurance network 30, then theprofitability of both the insurance network 30, and the healthcarepractice 25 are enhanced. Typically, alternative medications areavailable that combat the same illnesses. In some instances, however,either the physician is not familiar with the alternative medication orthe patient 35 insists on a particular brand-name medication merelybecause the brand-name medication has been greatly advertised, marketed,or commercialized.

[0039] The step of identifying the at least one physician 56 preferablyincludes analyzing the data 58 collected from the physicians and theancillary medical network databases to determine the ancillary medicalcosts 45 of each physician 27 in the healthcare practice 25. The step ofidentifying the at least one physician 56 also preferably includescalculating 60 an average ancillary medical cost per physician in thehealthcare practice 25. After an average is calculated 60, physicians 27having ancillary medical costs 45 that fall a predetermined standarddeviation away from the average, e.g., two standard deviations from theaverage of their peers in the healthcare practice 25, are identified 56and targeted for intervention. Should a point be reached where nophysician 27 falls beyond the two standard deviation limit, then apredetermined percentage of the physicians having the highest or higherthan average ancillary medical costs 45 will be considered forintervention.

[0040] The method of managing the healthcare practice group 20 andoptimizing the profitability of an insurance network 30 both furtherinclude identifying patients 27 and ancillary medical procedures thathave costs above the average ancillary medical cost calculated above.For example, the step of identifying patients 27 whose ancillary medicalcosts 45 are greater than the average ancillary medical costs perphysician can include identifying patients who have pharmacy costsgreater than the average pharmacy cost of the physician. Another examplepreferably includes identifying prescription medications having a highercost than the average prescription medication cost of the healthcarepractice 25.

[0041] When the physician 27 that has ancillary medical costs 45 greaterthan the average ancillary medical costs of the healthcare practice 25is identified, the method of managing the healthcare practice group 20and optimizing the profitability of an insurance network 30 both furtherinclude conferencing with the identified physician 27 to discuss theimpact of not taking any action regarding ancillary medical cost 45overruns.

[0042] The method of managing the healthcare practice 20 and the methodof optimizing the profitability of an insurance network 30 both furtherinclude modifying the physician's management behavior 65 regarding theancillary medical costs 45. The physician's management behavior ismodified to advantageously reduce the risk of not collecting thepredetermined reimbursement amount from the insurance network 30 tothereby increase the physician's profitability. The physician's modifiedmanagement behavior can also advantageously increase the profitabilityof the insurance network 30.

[0043] The step of modifying the physician's management behaviorincludes educating 70 the at least one physician 27 on benefits ofalternative ancillary medical procedures. The education 70 of thephysician 27 can be performed using research literature for comparingthe alternative ancillary medical procedures to current ancillarymedical procedures. The education 70 can further include organizingcontinued medical education classes 71 through ancillary medicalfacilities and can also include the education 72 of nurses and ancillarystaff members. This is advantageous because continued medical educationclasses are generally required in order for a physician 27 to keeplicensing requirements current. The continued medical education canadvantageously fulfill the physician's licensing requirement whilesimultaneously educating the physician 27 as to the benefits ofalternative ancillary medical procedures that may be more advantageousto themselves as well as to their patients.

[0044] The step of educating 70 the at least one physician 27advantageously includes providing the at least one physician nationaltreatment gridlines for stepwise treatment of disease states. Too oftenprescription medication representatives, such as sales representatives,convince physicians 27 that the newest medication is necessary to treatpatients 35 and other regimens should be skipped or abandoned. The stepof educating 70 the physicians 27, therefore, includes recommending thatphysicians 27 follow nationally recognized guidelines and treatmentprotocols, such as from the Center for Disease Control (CDC) and theNational Institute of Health (NIH), for example.

[0045] This advantageously ensures that community accepted standards ofcare are being provided. The step of educating 70 the physicians 27 alsoadvantageously includes identifying the medications of choice for givendisease states and verify, through data analysis and dialog that medicalresearch indicates that modified physicians behavior will have afavorable impact. The step of educating 70 the physicians 27 usingpeer-reviewed, medical research based literature recommending nationallyrecognized guidelines also advantageously decreases liability incurredby physicians 27. The physicians' 27 medical malpractice liability canadvantageously be decreased if the physician follows nationallyrecognized guidelines and treatment protocols.

[0046] The step of modifying the physician's management behavior alsoincludes providing patient history updates. If, for example, thephysician 27 makes a decision to modify a patient's 35 prescriptionmedication in the interest of decreasing pharmacy cost, for example, thepatient history updates become very advantageous for the general safetyand welfare of the patient 27. At the time of ordering the newprescription, physicians 27 may not have all the patient's 35 medicalhistory to prescribe a medication without inducing an adverse drugreaction (ADR). ADR's often lead to increased repeat visits to thephysician 27 for the same ailment and possibly to a hospital, whichincrease the healthcare practice's 25 health care cost tremendously.After the gathered data, provided by a pharmacy benefits management(PBM) company or a pharmacy claims benefit administrator, for example,is analyzed, printouts of the patients' 35 prescription history canadvantageously be provided to the physician 27. These printouts may beincluded in patient 35 charts for up-to-date reference by the physicians27.

[0047] As best illustrated in FIG. 2A, the method of managing thehealthcare practice 25 and the method of optimizing profitability of theinsurance network 30 further includes providing a list of ancillarymedical procedures, e.g., a list of preferred prescription medications,that are preferred by the insurance network 30. If the physicians 27follow the suggested ancillary medical procedure list, the physicians 27are more likely to receive the predetermined reimbursement from theinsurance network 30, thereby providing enhanced profits to thephysicians 27 as well as to the insurance networks 30. The enhancedprofitability advantageously allows the insurance network 30 and thephysicians 27 to provide more cost-effective medical treatment to thepatients.

[0048] As also illustrated in FIG. 2A, the methods of managing thehealthcare practice 25 and optimizing profitability of the insurancenetwork 30 also advantageously include providing custom ancillarymedication procedure forms 75, i.e., custom prescription medicationpads, for use by the physician 27 to easily recognize which ancillarymedical procedures are preferred by the insurance network 30. Forexample, the physician 27 is provided a custom prescription medicationpad 75 that includes a vast list of prescription medications that arepreferred by the insurance network 30. This eliminates the timenecessary for the physician 27 to perform research on which medicationsare preferred by the insurance network 30.

[0049] Physicians 27 sometimes participate in a number of insurancenetworks 30. Differing insurance networks 30 normally have differingpreferred ancillary medical procedures. When the physicians 27participate in differing insurance networks 30, it becomes difficult todetermine which ancillary medical procedures are preferred by each ofthe different insurance networks 30. The various insurance networks 30normally have overlapping ancillary medical procedures. Therefore, thestep of providing custom ancillary medical procedure customization formsalso includes the step of providing custom ancillary medical procedureforms that account for the overlapping ancillary medical procedures ofthe various networks and advantageously eliminate the need for thephysician 27 to take the time to research what insurance network 30 thepatient 35 participates in and which ancillary medical procedures arepreferred by the particular insurance network 30 in which the patient 35participates. The custom ancillary medical form that accounts foroverlapping ancillary medical procedures between various insurancenetworks 30 advantageously allows the physician 27 to engage in anyancillary medical procedure that is listed on the form without any riskof not receiving the predetermined reimbursement amount from theinsurance network 30.

[0050] As best illustrated in FIG. 2A-2C the methods of managing ahealthcare practice 25 and optimizing profitability of an insurancenetwork 30 of the present invention also includes providing patientintervention 80 to enhance the profitability of the physicians 27 andthe insurance networks 30. One source of increased ancillary medicalcosts are unnecessary patient requests. The patients 35 sometimesrequest particular ancillary medical procedures because of a lack ofknowledge regarding alternative ancillary medical procedures. Forexample, some patients 35 insist on brand-name medications that arelargely commercialized without having the requisite knowledge to make aninformed decision regarding alternative ancillary medications. The stepof providing patient intervention 80 advantageously includes identifying56 the patients who participate in ancillary medical procedures that arenot preferred by the insurance network 30 and put the physician 27 atrisk of not receiving a predetermined reimbursement from the insurancenetwork 30. The method of providing the patient intervention 80 alsoadvantageously includes discontinuing 82 the current ancillary medicalprocedure and amending it with a new ancillary medical procedure that ispreferred by the insurance network 30 and reduces the risk of thephysician 27 not receiving the predetermined reimbursement amount fromthe insurance network 30.

[0051] The step of providing patient intervention can advantageouslyinclude contacting patients 35 that are affected by poly-pharmacy andnon-compliance, for example. The step of contacting patients includescontacting the patients 35 on a monthly basis. Poly-pharmacy occurs whenthe patient 35 is taking medications with ADR's, unnecessarymedications, or those from the same medication class. In addition, if itis discovered during the step of analyzing the gathered data that thepatient 35 is not taking the prescription medication as required, thestep further includes contacting the patient 35 with a directive tocomply with the treatment protocols. The contact to the patient 35 can,for example, be made in the form of a letter written on the physician's27 letterhead.

[0052] The step of providing patient intervention also advantageouslyincludes determining if stronger disease state management techniques arerequired. This determination is conducted on a monthly basis. For thosepatients 35 with aggressive diseases, specialist organizations areemployed to provide recommendations to the physicians 27 and thepatients 35 on the latest treatments techniques.

[0053] The steps of discontinuing and amending 82 current ancillarymedical procedures includes providing information to the patients 35regarding the benefits of the new alternative medical procedure, e.g.,information that a lay-patient can understand regarding the benefits ofan alternative prescription medication. The step of providing patientintervention also includes providing a monthly review of patient'scharts to determine if the new ancillary medical procedures aresufficient for the patient's treatment. As patients are identified 56that are not being treated per guidelines of alternative ancillarymedical procedures, a chart 48 is advantageously inserted into apatient's medical chart, recommending an alternative ancillary medicalprocedure. The chart insert 48 advantageously includes an explanation ofthe recommended and pre-written ancillary medical procedure orders,i.e., pre-written prescriptions, for the physician's approval.

[0054] The physicians 27, however, do not always yield to the preferredancillary medical procedures of the insurance network 30. When thephysicians 27 encounter a situation where, relying on their vast medicalknowledge, they know a proposed ancillary medical procedure isdetrimental to the patient 35, then the insurance network 30 isapproached to consider modifying their preferred ancillary medicalprocedures. Like the physicians 27, the insurance network 30 is educatedregarding the benefits of the ancillary medical procedure that they seekto modify. This advantageously levels the playing field betweenphysicians 27 and insurance networks 30. The present invention providesfor the possibility that the insurance network 30 will yield to themedical judgment of the physician 27 concerning the treatment ofpatients 35.

[0055] The step of discontinuing an ancillary medical procedure 82further includes the step of preparing a plurality of letters. The stepof preparing letters includes the healthcare consultation group 22obtaining permission 84 from the physician 27 to distribute letters 85to the patients 35 that are candidates for modification of ancillarymedical procedures. One of the plurality of letters informs theancillary medical facility of the discontinuation of a particularancillary medical procedure 86. Another of the plurality of lettersinforms the patient that a particular ancillary medical procedure isdiscontinued 87. The letters can advantageously be written on thephysician's letterhead. The letter to be sent to the patient 87advantageously includes a detailed explanation of why the ancillarymedical procedure is being modified, the benefits of the new ancillarymedical procedure, and the advantages that patient 35 will obtain fromusing the new ancillary medical procedures. The letter to be sent to theancillary medical facility 86 instructs the ancillary medical facilitythat the ancillary medical procedure is discontinued and can alsoadvantageously inform the ancillary medical facility of an amendment tothe ancillary medical procedure. The step of discontinuing the ancillarymedication also includes providing the physician 27 with a list of“frequently asked questions and answers” so that the physician 27 isprepared for what may be difficult questions posed by the patients 35.This advantageously allows the physician 27 to give the patients 35clear and concise answers that do not make the patient 35 feel as thoughthe physician 27 and the insurance network 30 are taking advantage ofthe patient.

[0056] The step of providing patient intervention also advantageouslyincludes ordering a new alternative ancillary medical procedure upon anew diagnosis 83. The step of ordering a new ancillary medical procedureadvantageously includes providing a monthly update 90 to the physicians27 regarding new alternative ancillary medical procedures. The monthlyupdates can come in the form of a newsletter, for example. The step ofordering a new ancillary medical procedure also advantageously includesproviding a review 91 between the physician 27 and the healthcareconsultation group 25 regarding new ancillary medical procedures andeducation 92 provided to the physicians 27 and patients 35 regarding thenew ancillary medical procedures. The patient's chart is periodicallyreviewed 93 to ensure that the new ancillary medical procedure iseffective and treatment guidelines are provided 94 on a chart insert 48,as illustrated in FIG. 6A.

[0057] The methods of managing the healthcare practice 25 and optimizingthe profitability of the insurance network 30 also advantageouslyincludes updating 90 physicians 27 regarding changes of ancillarymedical procedures preferred by the insurance network 30. The step ofupdating 90 can advantageously include mailing the updated changes toeach of the physicians 27 in the healthcare provider group 22 using anewsletter, or can advantageously include transmitting the changes tothe physicians 27 via electronic mail or flyers, or other types ofupdates. The step of updating 90 can also advantageously includeconnecting to a communications network 100 where to access the updatedinformation. This advantageously eliminates the time necessary for thephysicians 27 to research new preferred ancillary medical procedures.The updates are also a form of continuing education for the physician 27to learn of new techniques and medications that are available to enhancethe treatment of the patients 35.

[0058] Some healthcare practices 25 have opted to use personal digitalassistants (PDAs) or other electronic data entry and retrieval hardwarein their practices. For those groups, whenever possible, the hardwareand/or software will be integrated with the information and servicesprovided as described above. Allscripts, Parkstone, and Realtime Rx arejust a few examples of companies that sell or lease such equipment. Thiswill be done in an effort to disencumber the physicians 27 so they canfocus on better management of their time.

[0059] As best illustrated in FIGS. 1A and 5, the present inventionadvantageously includes a healthcare management optimization system 20for a healthcare practice 25 including a plurality of physicians 27participating in an insurance network 30. The system can advantageouslyinclude a server 102 with a database 103 and a communications network100. The system 20 also preferably includes a plurality of computers 108positioned to be in communication with the communications network 100,each including a user interface responsive to a user U. The database 103can advantageously include first 105 and second 107 databases. The firstdatabase 105 includes information regarding preferred ancillary medicalprocedures of an insurance network. The second database 107 includesancillary medical costs of a plurality of physicians 27 participating inthe insurance network 30. The system further includes an updater 109positioned on the server 102 and responsive to the user interface forupdating each of the plurality of physicians 27 on any changes ofpreferred ancillary medical procedures preferred by the insurancenetwork 30.

[0060] The system 20 of the present invention also includes an analyzersuch as provided by software programs stored on a computer or processoras understood by those skilled in the art positioned on the server 102and in communication with the first 105 and second 107 databases forcomparing the ancillary medical procedures that are preferred by theinsurance network 30 with the ancillary medical costs 45 of theplurality of physicians 27 participating in the insurance network 30.The analyzer advantageously identifies ancillary medical costs 45 of thephysicians 27 that are not preferred by the insurance network 30. Theanalyzer further includes calculating means for calculating an averageancillary medical cost 45 per physician 27 for the healthcare practice25. The average ancillary medical cost 45 is used to identify thephysicians 27 that are in need of assistance to reduce the risk of notreceiving the predetermined reimbursement amount for ancillary medicalcosts 45 from the insurance network 30.

[0061] The system 20 still further includes recommending means, e.g.,provided by software as understood by those skilled in the art,positioned on the server 102 and responsive to the user interface forrecommending to each of the plurality of physicians 27 alternativeancillary medical procedures that are preferred by the insurance network30. The recommending means can advantageously be provided by softwarethat resides on the server 102. The system also preferably includesmanaging means, e.g., provided by software as understood by thoseskilled in the art, for managing ancillary medical cost managementbehavior of the physicians 27. The managing means can advantageously beprovided by software that resides on the server 102. The managing meanspreferably includes a modifier to modify the management behavior of thephysicians 27 so that the physicians 27 engage in ancillary medicalprocedures that are preferred by the insurance network 30. The managingmeans also includes an identifier for identifying at least one of theplurality of physicians 27 in the healthcare practice 25 participatingin the insurance network 30 that is at a greater risk of not receiving apredetermined reimbursement amount for the ancillary medical costs 45from the insurance network 45 because of engagement in ancillary medicalprocedures that are not as profitable to the insurance network 30.

[0062] The system 20 of the present invention still further includespatient intervening means, e.g., provided by software as understood bythose skilled in the art, for identifying at least one patient 35 whosepresent ancillary medical procedures are not preferred by the insurancenetwork 30. The patient intervening means can advantageously be providedby software that resides on the server 102. The management means of thesystem 20 further includes generating means, e.g., also preferablyprovided by software as understood by those skilled in the art, forgenerating a plurality of letters to modify the ancillary medicalprocedures of the physician 27. The letters include first and secondletters. The first letter informs the ancillary medical facility thatthe patient's 35 present ancillary medical procedure is modified. Thesecond letter is sent to the patient 35 to inform the patient of the newancillary medical procedure. The second letter includes educationalinformation informing the patient 35 of the benefits of the newancillary medical procedure and educational materials that may answerany questions that the patient 27 may have.

[0063] As illustrated in FIG. 3, the present invention also providesmethods of collecting fees 120 for managing and optimizing theprofitability of a plurality of physicians 27 in a healthcare practice25 and for managing and optimizing the profitability of an insurancenetwork 30. The method includes establishing a relationship 122 betweena healthcare consultation group 22, a plurality of physicians 27 in ahealthcare practice 25, and an insurance network 30. This advantageouslyprovides a team working towards a common goal, i.e., a team workingtowards the goal of enhancing profitability through better and morecost-effective healthcare. The newly established relationship can beused to modify the physicians' ancillary medical cost managementbehavior to enhance the profitability of the insurance network 30 and toreduce the physician's 27 risk of not receiving a predeterminedreimbursement amount for ancillary medical costs from the insurancenetwork 30.

[0064] The method of collecting fees 120 can advantageously include thestep of the healthcare consultation group 22 funding an incentive pool124 to be paid to the healthcare practice 25, or to the insurancenetwork 30, depending upon who hires the healthcare consultation group22. The healthcare consultation group 22 only collects a fee if theirservices to the healthcare practice 25 and the insurance network 30 aresuccessful. Therefore, the fees are only collected on a success-feebasis. In some cases, however, a nominal fee may be charged by thehealthcare consultation group 22 before services are performed. Themeasure of success of the services of the healthcare consultation group22 is a decrease in healthcare costs of the insurance network 30 and thephysicians 27 in the healthcare practice 25 for specific ancillarymedical costs 45. If services of the healthcare consultation group 22,however, do not decrease healthcare costs for the plurality ofphysicians 27 or the insurance network 30 below a predetermined levelover a preselected period of time, the funds in the incentive pool areturned over to the healthcare practice 25 or the insurance network 30,depending on who is the healthcare consultation's group 22 client. Thisadvantageously provides accountability to the healthcare consultationgroup 22. Accountability will ease the minds of the healthcare practice25 and insurance network 30 giving the healthcare consultation group 22a chance to prove that profits can be enhanced.

[0065] The method of collecting fees 120 further includes distributingpredetermined percentages 126 of savings attributed to the services ofthe healthcare consultation group 22. As illustrated in FIG. 3, thesavings are distributed to the healthcare practice Y, the healthcareconsultation group Z and the insurance network X. For example, thepercentages can be 40% to the consultation group. Clearly thesepercentages can vary depending on the client of the consulting group andan agreement between the parties. This arrangement advantageously allowsall involved to gain, including patients, through more cost-effectivemedical care. The predetermined percentage that is distributed to thehealthcare practice Y can advantageously be further distributed 128 inpredetermined percentages evenly to the healthcare practice 25 orallocated proportionately according to the savings of each of theplurality of physicians 27 in the healthcare practice 25.

[0066] The step of distributing predetermined percentages 126 of savingsattributed to the services of the healthcare consultation group 22 canadvantageously vary depending on whether the client of the healthcareconsultation group 22 is the healthcare practice 25 or the insurancenetwork 30. The distributed percentages can advantageously be equalbetween the healthcare consultation group 22, the insurance network 30,and the healthcare practice 25. If, for example, the client of thehealthcare consultation group 22 is the healthcare practice 25, then thepredetermined percentages distributed to the healthcare consultationgroup 22 and the healthcare practice 25 can be greater than thepredetermined percentage of the savings that are distributed to theinsurance network 30, e.g., the insurance network 30 may not collect anypercentage of the savings. If, however, the client of the healthcareconsultation group 22 is the insurance network 30, then thepredetermined percentages distributed to the healthcare consultationgroup 22 and the insurance network 30 can be greater than thepredetermined percentage of the savings that are distributed to thehealthcare practice 25.

[0067] The method of collecting fees can also advantageously include apricing, billing, or charging structure. The pricing structure of thehealthcare consultation group 22 is straight forward. The clients, i.e.,the healthcare practice 25 or the insurance network 30, measure theirancillary medical costs, or pharmacy costs for example, on a per-memberper-month (PMPM) basis. During a pharmacy assessment, an average PMPMpharmacy cost (baseline PMPM) is calculated using the clients past sixmonths pharmacy claims and membership data. Each month, the currentmonth's average PMPM pharmacy cost is subtracted from baseline PMPM inorder to determine the savings realized from the healthcare consultationgroup's 22 services.

[0068] A commission fee can advantageously be calculated onpredetermined percentage of the monthly client savings, e.g., 50% ofmonthly savings, multiplied by the number of patients each month. Forexample, a sustained $1.00 PMPM savings for client with 30,000 coveredlives would yield to the healthcare consultation group 22 $15,000 permonth, for up the duration of the contract. The contract can spanbetween one and three years, for example, or can have a longer duration.The healthcare consultation group 22 can collect a smaller feepercentage for longer contract durations. If the client desires a longercontract duration, the baseline PMPM can advantageously be increasedyearly with respect to annual inflation increases of wholesaleprescription medication costs. The risk reversal for the client is thatif there is no savings any month, the client pays nothing.

[0069] The pricing structure can also advantageously include a referralcommission, e.g., $0.25, for each covered life, or a percentage of theclient's savings for example, provided to the strategic marketingpartners. This referral commission compensates for the commissions paidto sales people and people who refer business to the healthcareconsultation group 22. Thus, the healthcare consultation group 22minimizes the marketing budget while advantageously maximizing marketingresults.

[0070] The application is related to U.S. patent application Ser. No.______titled “Methods and Systems for Healthcare Practice Management”filed on the same date herewith by the same inventors, which isincorporated herein by reference in its entirety.

[0071] In the drawings and specification, there have been disclosed atypical preferred embodiment of the invention, and although specificterms are employed, the terms are used in a descriptive sense only andnot for purposes of limitation. The invention has been described inconsiderable detail with specific reference to these illustratedembodiments. It will be apparent, however, that various modificationsand changes can be made within the spirit and scope of the invention asdescribed in the foregoing specification and as defined in the appendedclaims.

That claimed is:
 1. A method of collecting fees for managing andoptimizing the profitability of a plurality of physicians in ahealthcare practice participating in an insurance network, the methodcomprising the steps of: establishing a relationship between ahealthcare consultation group and the healthcare practice participatingin the insurance network to increase the physician's profitability byreducing a risk of not receiving a predetermined reimbursement amountfor ancillary medical costs from the insurance network; funding anincentive pool to be paid to the healthcare practice participating inthe insurance network if the ancillary medical costs of the plurality ofphysicians in the healthcare practice do not decrease to a preselectedlevel over a preselected period of time; and distributing predeterminedpercentages of savings attributed to the physicians' modified ancillarymedical cost management behavior.
 2. The method as defined in claim 1,wherein the step of distributing the predetermined percentages of thesavings includes dividing the savings between the healthcareconsultation group, the healthcare practice, and the insurance network.3. The method as defined in claim 2, further comprising collecting nofee if the healthcare practice does not reduce the ancillary medicalcosts to the preselected level over the predetermined period of time. 4.The method as defined in claim 3, wherein each of the respectivepredetermined percentages of savings distributed to the healthcareconsultation group and the healthcare practice are greater than thepredetermined percentage of the savings distributed to the insurancenetwork.
 5. The method as defined in claim 4, further comprisesproviding a billing structure wherein the savings are calculated bysubtracting current ancillary medical costs from predetermined baselineancillary medical costs.
 6. The method as defined in claim 5, furthercomprising calculating the fee for the healthcare consultation group bymultiplying a predetermined percentage of the savings by the number ofpatients participating in the healthcare practice.
 7. The method asdefined in claim 1, wherein the ancillary medical costs include anycosts taken from the group of pharmacy, radiology, laboratory,anesthesiology, occupational therapy, physical therapy, speech therapy,therapeutic radiology, operating room, or emergency room costs.
 8. Amethod of collecting fees for managing and optimizing the profitabilityof a plurality of physicians in a healthcare practice participating inan insurance network, the method comprising the steps of: establishing arelationship between a healthcare consultation group and the healthcarepractice participating in the insurance network to increase thephysician's profitability by reducing a risk of not receiving apredetermined reimbursement amount for ancillary medical costs from theinsurance network; and distributing predetermined percentages of savingsattributed to the physicians' modified ancillary medical cost managementbehavior.
 9. The method as defined in claim 8, further comprises fundingan incentive pool to be paid to the healthcare practice participating inthe insurance network if the ancillary medical costs of the plurality ofphysicians in the healthcare practice do not decrease to a preselectedlevel over a preselected period of time.
 10. The method as defined inclaim 9, wherein the step of distributing the predetermined percentagesof the savings includes dividing the savings between the healthcareconsultation group, the healthcare practice, and the insurance network.11. The method as defined in claim 10, further comprising collecting nofee if the healthcare practice does not reduce the ancillary medicalcosts to the preselected level over the predetermined period of time.12. The method as defined in claim 11, wherein each of the respectivepredetermined percentages of savings distributed to the healthcareconsultation group and the healthcare practice are greater than thepredetermined percentage of the savings distributed to the insurancenetwork.
 13. A method of collecting fees for managing and optimizing theprofitability of an insurance network having a plurality of physiciansin a healthcare practice participating therein, the method comprisingthe steps of: establishing a relationship between a healthcaremanagement consultation group and the healthcare practice participatingin the insurance network to increase the insurance network'sprofitability by limiting the plurality of physicians' ancillary medicalcost management behavior that is not preferred by the insurance network;and distributing predetermined percentages of savings attributed to thephysicians' modified ancillary medical cost management behavior.
 14. Themethod as defined in claim 13, further comprising funding an incentivepool to be paid to the insurance network if the modified medicalmanagement practices do not decrease ancillary medical costs of theinsurance network to a preselected level over a preselected period oftime; and
 15. The method as defined in claim 14, wherein the step ofdistributing the predetermined percentages of the savings includesdividing the savings between the healthcare management consultationgroup, the healthcare practice, and the insurance network.
 16. Themethod as defined in claim 15, further comprising collecting no fee ifthe insurance network does not decrease ancillary medical costs to thepreselected level over the preselected period of time.
 17. The method asdefined in claim 15, wherein each of the respective predeterminedpercentages of savings distributed to the healthcare consultation groupand the insurance network are greater than the predetermined percentageof the savings distributed to the healthcare practice.
 18. The method asdefined in claim 17, further comprises providing a billing structurewherein the savings are calculated by subtracting current ancillarymedical costs from predetermined ancillary medical costs.
 19. The methodas defined in claim 18, further comprising calculating the fee for thehealthcare consultation group by multiplying a predetermined percentageof the savings by the number of patients participating in the healthcarepractice.
 20. The method as defined in claim 13, wherein the ancillarymedical costs include any costs taken from the group of pharmacy,radiology, laboratory, anesthesiology, occupational therapy, physicaltherapy, speech therapy, therapeutic radiology, operating room, oremergency room costs.